Kiel Working Papers, Kiel Institute for World Economics
No 1856:
Is Organic Farming Worth its Investment? The Adoption and Impact of Certified Pineapple Farming in Ghana
Linda Kleemann, Awudu Abdulai and Mareike Buss
Abstract: Global food markets demand the adoption of food standards
by small-scale farmers in developing countries when they enter
international markets. While a conventional certification with GlobalGAP
can be a market entry condition for conventional food, especially for
horticultural products, organic certification is required for the growing
organic food market that is usually associated with higher prices. This
study analyzes the adoption and profitability of organic certified farming,
using recently collected farm-level data of 386 Ghanaian pineapple farmers.
We employ an endogenous switching regression model to examine the adoption
and impact of organic certification on the return on investment (ROI). The
empirical results indicate that both organic certification and GlobalGAP
certification result in a positive ROI. However, organic certified farming
yields a significantly higher ROI than GlobalGAP certified farmers, mainly
due to the price premium on the organic market. Thus, certified organic
farming is found to be the more profitable venture
Keywords: return on investment, impact assessment, organic agriculture, GlobalGAP certification, contract farming; (follow links to similar papers)
JEL-Codes: O13,; Q13,; Q17,; Q56; (follow links to similar papers)
33 pages, July 2013
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